“Effective leadership is not about making speeches or being liked. Leadership is defined by results.” – Peter Drucker

In an article last April, I prematurely cited Davey Johnson (Manager of the Washington Nationals) as an extraordinary example of leadership. Despite their colossal collapse in the 2012 playoffs, his rhetoric elevated the Nationals into a Las Vegas favorite to win the 2013 World Series. However, his results were 86 wins and 76 loses – 10 games behind the Atlanta Braves and out of the playoffs. The team had the skill and desire to win but failed to execute. The losses got blamed on injuries, slumps, and bad luck – just like everyone in Washington blamed someone else for the government shutdown. The National’s rallying cry “wait until the 2014 season” is eerily similar to the “wait until the 2014 elections” cry in the halls of Congress.

Results – Not Rhetoric. Washington is the Major League of government and its leaders should be world class. Unfortunately, their recent leadership failures are akin to the Nationals missing the playoffs. A disengaged president and a gridlocked Congress preach change, but results didn’t happen because their execution didn’t match their words. Without effective execution, deadlines pass, breakthrough thinking breaks down, and the situation deteriorates. The country ended up in worse shape than if the rhetoric had never occurred in the first place.

Washington’s Results. The shutdown and sequestration are just Washington’s most recent in a decades-long series of failures. The World Economic Forum currently ranks the U.S. as the world’s seventh strongest economy – down from #1 as recently as 2009 – due to under-investment in infrastructure and R&D, deteriorating educational and health care systems, and ballooning debt. For example, the American Society of Civil Engineers grades the U.S. infrastructure (e.g., roads, aviation, mass transit, power and water distribution, and sewage treatment) as “D” – a single grade away from the point where everyday things simply stop working. Experts, including several former Secretaries of Transportation, have warned about the decline, but only after disasters like superstorms Katrina and Sandy does anything happen. As long as lights come on, water flows from faucets, streets are reasonably smooth, and planes don’t crash, the decline is ignored.

The U.S. Remains Ahead, but… American power is eroding faster than any of us like, but the U.S. still leads the world in GDP. Despite gridlock in Washington, the U.S. economy continues to expand at a modest pace and an energy boom is fueling growth, creating jobs, and revitalizing manufacturing. But how many jobs could have been created if Washington became a positive influence instead of a ball-and-chain that the economy drags along?

Arguing about the Wrong Things. Washington is stuck in endless debates about continuing resolutions and debt limits – topics that are only marginally related to the country’s real opportunities and needs. S&P estimates the shutdown reduced GDP growth by 0.6% – 40 times the controversial medical-device tax that represents only 0.015% of GDP. Furthermore, Congress hasn’t passed a national budget since fiscal 1994 – 20 years ago. The budget deficit is a second-order issue compared to stagnant growth, chronic unemployment, and a declining percentage of citizens participating in the economy.

The Highest Priority. Actions that matter in the long run should be priorities for the White House and Congress. Debates about growth and jobs are more important economically and more palatable politically than sequestration and budget deals. The Congressional Budget Office estimates that an annual add-on of 0.2% in GDP growth would eliminate the budget gap in about 10 years. In addition to curtailing debt, rapid growth would raise household incomes, make the U.S. more competitive globally, enable state and local governments to balance their budgets, and push industry to make new hires and invest in R&D. Growth-accelerating policies would be felt more strongly on Main Street than measures to raise taxes or cut spending.

Accelerating Growth. Neither political party has a monopoly on good ideas to accelerate growth. We need more investments in renewable energy sources and exploitation of the natural gas deposits that have recently been discovered. We need better education and increased accountability for those who deliver it. We need investments in public infrastructure and reductions in regulations that inhibit private investments. We need to cut greenhouse gas emissions that contribute to climate change and invest in new oil pipelines and power distribution networks. We need higher minimum wages and a job for every American.

Call to Action. If a fraction of the mindshare spent on budget deals over the last five years had been invested instead on growth strategies, the American economy would be flourishing and government finances would have been restored as a bi-product. An over-whelming majority of the American people say the country is moving in the wrong direction, but reducing political in-fighting is just part of the solution. The White House and Congress must focus on issues that matter to everyone: jobs and growth. Lasting prosperity can only be produced through excellence in execution – in both government and the private sector. Execution is the vital link between rhetoric and results. Effective leaders execute – they move smoothly from debate into action and implement course corrections if things get off-track.

“You can get everything you want in life if you just help enough other people get what they want.” Zig Ziglar

The City of Detroit filed for bankruptcy in July – the largest municipal bankruptcy in U.S. history. The Motor City’s drop from the fourth largest city parallels the decline of the U.S. auto industry. After losing more than a million citizens since the 1950s, the city’s tax revenue base has fallen steadily. Win-lose demands and concessions among leaders in the union, the auto companies, and the city government – each demanding more for themselves – caused everyone to lose.

Leadership Out of Balance. At its peak in the 1970s, the United Auto Workers (UAW) had 1.5 million members and was a leader in local and national politics. Without the UAW, Detroit may not have achieved the prosperity it once enjoyed. On the other hand, the union’s decline to 400,000 members is a result of its heavy-handed success in extracting high pay and benefits for members. When the U.S. became uncompetitive in auto manufacturing, thousands of former-UAW workers were unable to find equivalent jobs in other fields. One blogger commented: “If you can’t find a new job at the same pay as your old job, you were overpaid.” The same can be said about out-of-balance leadership in trade associations, Chambers of Commerce, and other special-interest groups.

Joint Decline. It once was said “What’s good for General Motors is good for America” – the inverse also was true. Starting in the 1970s, rising wages and benefits and competition from German and Japanese car makers eroded the profits of U.S. automakers. Even when Volkswagen, Toyota, and other foreign companies opened non-union plants in the U.S. and won market share by offering low prices, the UAW stubbornly demanded wage hikes. At the same time, U.S. automakers built plants in other countries rather than have the UAW build cars in Michigan for export. Some people blame the automakers for trying to increase profits, but that’s like blaming the UAW for seeking higher wages. Both company and union leaders pursued a win-lose strategy for their constituents.

Detroit Becomes a Victim. After World War II roughly 75% of the world’s automobiles was manufactured in the U.S. – today, the figure is under 25%. That cataclysmic decline coupled with decades of misguided leaders and unsustainable financial practices have left Detroit with massive debt. Nearly half the city’s liabilities stem from pension and health care promises to retirees. Like most cities and states, Detroit gives employees a defined-benefit pension based on years of service and final salary. Incidentally, Social Security is the world’s largest defined-benefit program.

Detroit’s Symptoms Spread. Ballooning pension liabilities are partly an adverse side-effect of a fortuitous trend: we live longer! But most of the problem is political. Mayors, governors, Congress and presidents have bought votes by offering fat pensions and deferring the bill to future generations – our children and grandchildren will be paying our Social Security and Medicare benefits until we die. Bankruptcy may save Detroit’s budget, but it won’t fix the core issues of chronic unemployment, declining educational systems, and under investment in infrastructure. It took 50 years of out-of-balance leadership to erase Detroit’s success. How long will it take for Congressional inaction to do the same at the national level?

Denying the Problem. Detroit’s bankruptcy is scary. Not because of its immediate impact, but because political leaders are ignoring the flashing-red warning. When Greece first ran into trouble a few years ago, European leaders were surprised that the problem spread to other countries. American leaders seem to be in a similar state of denial. City, state and Congressional leaders should pay attention. They could end up like Detroit because they have made similarly unsustainable retirement and health care promises and are pretending that the problem doesn’t exist.

Growing Importance of Cities. The survival of Detroit and other cities is critical to the country. Cities have always been a major source of growth and they are even more important in today’s global economy – more than 50% of the world’s population lives in them. The 2010 census showed that the population in U.S. cities is growing faster than suburbs due to job availability and mass transportation. Businesses are being lured back to cities after decades in suburban office parks. For example, consider Apple’s huge new campus being built in Cupertino, California. Mayors are turning to companies to provide the jobs required for economic prosperity. There may be hope for Detroit after all.

Competition among Cities. Of course, businesses are using jobs to negotiate special deals. There is stiff competition among mayors and governors to attract businesses with tax incentives. Many cities are building bicycle paths and garden apartments to attract the knowledge workers that businesses want. The trend is Win-Win-Win. Cities win because businesses rebuild urban areas that were decaying and dangerous. Businesses prosper because of plentiful, low-cost utilities and labor. And citizens win because their quality of life improves.

Supportive Relationships Flourish. Only mutually supportive relationships survive. Is it possible for workers to prosper while their employer goes bankrupt? Is it possible for a business to thrive while its workers and the environment struggle? Is it possible for a government to succeed while its citizens are unemployed and businesses are unprofitable? What alternatives do the UAW and automakers have today? The same win-win alternatives they rejected decades ago when the market share of foreign automakers was of little consequence. The same choices are available to state and federal governments and special-interest groups.

Potential Fix. Relative to the pension challenge, public pension plans must shift to pay-as-you-go defined-contribution plans like those in the private sector. Promises to those who have already or are close to retirement should be honored, but future liabilities must be contained. Retirees in the private-sector face a different problem. Defined-contribution plans have two risks: (1) declining markets and/or inflation erode savings, and (2) people outlive their savings. So everyone should be encouraged to work longer, save more, and opt into pension plans. The movement of jobs into cities and the baby-boomers’ move to downsize as they retire provides an opportunity to rebuild cities. Only when the severity of the challenge is clear can everyone work together to implement reforms. The sooner we tackle the problem the easier it will be to fix.

Justin, a group manager in a government technology firm, assigned writing tasks for a must-win proposal to key members of his billable staff and committed to do competitive research himself. He gave each person instructions on what he expected and provided a detailed schedule for preparing the proposal. At the first weekly review, Justin was disappointed by the mediocre progress – strategy questions were impeding progress. He responded to the questions as best he could and acknowledged that he hadn’t started his research because he “had high priority customer work.” The team felt like the extra hours they invested in the proposal weren’t appreciated and their pleas for help were falling on deaf ears.

Tunnel Vision. Some executives see their organization as a machine and people as the gears that make it run. With tunnel vision, they tell people what to do, how to do it, and when it must be done while missing feedback about how the objectives might be achieved more quickly and easily. Such executives implement procedures to maintain control and are surprised when people respond by waiting to be told what to do. In contrast, effective leaders understand that their organization is a collage of individual expectations connected by the promise of shared success. They reach out to build relationships and have conversations that motivate and inspire as well as direct.

High Price of Ignoring Ideas. One reason why coaches are brought into organizations is the inability of executives to treat peers, direct reports, customers and other stakeholders with respect – to value who they are as well as what they contribute. At one time or another, most of us have worked for a boss who discounted or ignored our ideas. Like me, you may recall those positions as the most frustrating and least rewarding segments of your career. By allowing people to give voice to their ideas – even ones that seem off-the-wall at first – you will have conversations that lead to more effective approaches, deepen mutual respect, and increase everyone’s commitment to the outcome.

Common Myth. One common myth about being in a leadership position is that everyone will follow you merely because of your title. That belief often plays out when new leaders expect people to adopt new practices. “Now that I’m the boss, here’s how we’ll do things.” Instead, new leaders increase their chances for success by holding conversations that align everyone behind a change. “I’m glad to be here. How can we improve our results? What changes would you like to make?” A shared vision strengthens relationships and avoids resistance.

People’s Expectations. You may have coached a sport, managed a project, and/or led a large organization. Those experiences share a key characteristic: the group’s objective was bigger than any one person could accomplish alone. When you were called to lead, people expected you to be an expert – even if you were not. They also expected you to tap their highest potential and mold them into a winning team. As a leader, your challenge was to get each person to perform at an optimal level in alignment with each other. That challenge required you to build a relationship with each of them, to talk and listen to them, and to inspire them to do their best.

Comfort Zone. At the start each new challenge, the objective may have been outside your people’s comfort zone. While they were excited about the possibilities, their enthusiasm was diluted by their concerns. Such mixed optimism and fear are a natural part of anything new. Stepping through fear is what separates winners from losers. Empathize with your people as they experience feelings that may be similar to those you felt when you were in their shoes – and ones you are feeling or may feel yourself.

Emotional Agility. Emotional agility is the ability to quickly achieve an effective emotional state under stressful circumstances. Like an athlete preparing for a playoff game, you must mentally prepare to motivate your people, calm tense situations, and address complex issues. Your emotional agility – or lack thereof – will significantly affect your performance and your team’s performance. The higher your leadership position, the wider the range of emotions you are likely to encounter in a single day – from celebration to condolences, from victory to defeat, from unexpected support to aggressive resistance. You must be able to quickly shift from the emotions you feel spontaneously to emotions that connect with people and motivate them to produce superior results in spite of difficult circumstances – like the today’s tight budgets and relentless competition.

“The only thing worse than training employees and losing them is not training them and keeping them.” – Zig Ziglar

A CEO recently lamented that his company’s revenue was flat and profits were down. The company had won new customers but was having difficulty filling key positions even with help from a top recruiter. Furthermore, no move-up candidates were available internally and several mid-level employees had left to take positions elsewhere. His company was losing the battle for talent because its growth strategy did not include a leadership development and retention program.

A Risky Approach. Organizations that lack effective training programs are forced to offer lucrative compensation to buy superstars in the open market – a time-consuming, expensive, and risky approach. The problem is that everyone pursues the same talent. Organizations that consistently grow leaders produce better results. The issue isn’t just that organizations don’t develop the leadership, management, and technical skills they need to succeed. It is even more troubling: the organization underperforms when the business grows faster than the staff’s capabilities.

Sink-or-Swim. Another symptom of a weak developmental program is promoting employees into key positions hoping they already know or will learn what they need to know. After congratulations, a salary bump and a new title, sink-or-swim promotees receive little help in understanding – let alone conquering – the challenges of their new position. Conversations to set expectations, establish metrics, and mentor usually do not occur. The sink-or-swim approach to promotions produces one of three results:

They will succeed on their own (which may be how you did it)

When results fall short, you will step in to fix the problem, or

Eventually they will leave, be demoted, or be fired.

It’s more effective and easier on everyone to avoid fix-it-later by having developmental conversations early and often with your high potentials.

The Responsibility to Develop Others. Next to setting the strategic direction, a leader’s most important responsibility is to develop people. Effective development programs produce a steady stream of fully qualified candidates that flows from the bottom to the top. Yet few organizations make coaching, training, and developmental assignments a cornerstone in their growth strategy. The problem starts at the top when CEOs neither mentor their CXOs nor insist that CXOs mentor their direct reports.

Hiring Choices. Hiring only exceptional employees is a given, of course, when new skills or more heads and hands are needed – but it is not sustainable as the primary way to find leaders. Hiring leaders costs too much and is more prone to error than promoting an employee who has institutional knowledge and established internal and customer relationships. Furthermore, many business stars change organizations so frequently that they fail to master the skills required at one level before moving up to the next. You may just be hiring someone else’s flash-in-the-pan who won’t be able to reproduce their prior successes in your organization.

Promotions. When evaluating candidates for promotion, remember that effective leaders are defined as much by how they think as by the skills they possess. Specifically, they:

Have a passion for what they do, and pursue goals with diligence and intensity

Collaborate with others, share information, and volunteer to help

Feel personally responsible for what happens. When things go right, they share credit; when things go wrong, they fix what’s wrong rather than blaming someone or something else.

Are curious learners who take risks, learn from results, and adapt easily to change

Do what they say they will do because their word is their bond.

These criteria sometimes seem soft to executives accustomed to making promotion and hiring decisions based on the superior skill in the previous position or as a reward for performance. When you consider that you’re not just filling an open position but are building the organization’s leadership inventory, hiring and promotion decisions takes on great importance

Mentoring Is Essential. Executives who view a job as a set of goals to be achieved miss the importance of developing people. Each rung on the ladder involves new priorities, more complex skills, and a different blend of leadership and management tasks than the previous one. The conversion of success at one level to success at higher levels requires you to mentor people rather than assume they will be able to do the new job. The need to mentor is even more vital when a key position is filled with a new hire. People who move up a level when they join an organization are particularly at risk. In addition to tackling new responsibilities, they must build new relationships, learn new processes and tools, and adapt to a new culture. They need more mentoring than a person who is promoted from within.

Bottom Line. Most executives acknowledge their responsibility to develop people. Yet few know how to do so – and even fewer make it a priority on a daily basis. Yet with a bit of planning, you can meet short-term objectives and grow people concurrently. Start by asking about successes and failures: why a seemingly solid strategy produced mediocre results, how a key deal was won, and why a critical deadline was missed. As a successful executive, you have felt the pressure of working with limited resources, meeting tight deadlines, and achieving stretch goals. Share your stories with your people by explaining how you conquered some challenges and struggled with others. Encourage them to have similar conversations with their people. Develop your people in every conversation you have with them no matter what the topic.

“If a manager is willing to listen, he will find that the average employee is loaded with ideas. So the first step in innovation is listening. The second is letting your employees work in different ways.” – Tom Peters

Would you characterize yourself as a curious person? Most people do since opposite traits like close-mindedness and apathy are not flattering. Curiosity pushes people to learn, to explore and to create. You have been curious since the day you were born – although you had more time to be curious as a child than you do as an executive. Even still, great leaders are innately curious about how the world works – and that curiosity propels business, technological and social progress.

Replace Judgments with Curiosity. The manager of a billion-dollar program proudly proclaimed that open-mindedness and innovation were core values in his program. He encouraged his staff to be open and honest with him, with each other, and with strategic partners. One day he asked his coach: “My people aren’t suggesting as many ideas as they once did. Sometimes I feel they aren’t telling me the whole story. Why?” Uncomfortably the coach replied: “Remember last week’s workshop when you said the new approach that Ian suggested was the dumbest thing you’d ever heard.” The manager responded: “Yes. But you didn’t think it was a viable option either.” The coach continued: “True. As presented it was unworkable. But judgments stifle creativity. I was very curious why an experienced engineer like Ian would think it was a good idea. If we had asked questions, we might have discovered a golden nugget behind his idea.” Lack of curiosity had turned the manager’s conversations into soliloquies instead of the vigorous discussions of bold, new strategies that he wanted.

Same Old Stuff. Similarly, lack of curiosity is contributing to the budget stalemate in Congress. Rather than examining fresh ideas, the same old politicians are redrawing the same old lines in the sand, and justifying them with the same old exaggerated claims. It’s time to ask new questions and be curious about other side’s perspectives. If growth in entitlements and spending must be contained as projections clearly show, and the government needs more revenue as most experts contend, and it is reasonable for high-income people to bear a larger tax burden as most Americans agree; then lots of possibilities are available. But instead of being curious about the options, crusaders on the left and right continue their silly contest to denigrate rather than understand each other. The potential for progress lies in reframing the debate by asking new questions and reinterpreting interests.

Listen to the Market. By no means does Congress have a monopoly on stubborn thinking. Business executives can be equally oblivious to market shifts with disastrous results. It’s not that companies like Zerox, RIM, Nokia, Kodak, Circuit City, Blockbuster and Best Buy failed to see market shifts. In most cases their staff had developed next-generation devices and business models, but senior executives were reluctant to introduce concepts that competed with their current success. Unfortunately, their market share plummeted when others introduced those concepts. What is sobering is the degree to which these companies dominated their markets before their rapid and surprising decline. While Apple, Google and Amazon emerged as big winners, they are no less vulnerable to such a decline – and neither is your organization.

The Take-Away Lesson. In “Good to Great to Gone” Alan Wurtzel, Circuit City’s former CEO, tells how his company rose to stardom and subsequently went bankrupt. His core message is the danger successful organizations face when they get stuck in a comfort zone – when they slow innovation because what they are doing is working well. Rapidly evolving technology is a shared link among the companies listed above. It’s difficult to project the direction of new technology, and even harder to guess how people will adapt it in their lives. The key to success in today’s fast-changing business world is not finding a crystal ball. Rather it is pursuing multiple possibilities, testing potentially conflicting strategies, and embracing them when the time seems right. Over the next decade there are likely to be more Kodaks, RIMs and Circuit Cities. You can avoid that fate by being curious about why things are going differently than you expect.

Institutionalize Curiosity. To institutionalize curiosity in your organization, focus attention – yours and your team’s – on asking thoughtful questions. Practice curiosity in conversations until it becomes second nature for everyone. You will need to:

Replace judgmental statements with open-ended questions

Listen carefully to the perspectives imbedded in the answers

Tell your team what is expected and allow them to innovate

Embrace failure – be curious about why a good idea didn’t work

Be transparent about the logic and priorities behind your decisions.

When you are considering multiple alternatives, craft your questions to explore the strengths and weaknesses of each one – usually no single alternative offers the ideal solution. Question everyone in the room including the most junior people. Rather than accepting one idea and rejecting others, ask curious questions that reveal the thinking behind an approach, the data that supports that approach, and any gaps in the reasoning.

Be Curious about Curiosity. Great leaders are curious about curiosity itself. They explore ways to be more curious themselves and to promote curiosity in their organizations. Paradoxically, what you already know can become an obstacle to curiosity. The so-called experts make decisions instantly because unconsciously they assume they know everything they need to know. Effective leaders see the fallacy in that thinking and escape the knowing trap by habitually asking questions. That’s how they avoid having their organizations go from good to great to gone.

A leader determines the organization’s direction in the decisions he or she makes about priorities.

President Obama hit the nail on the head when he said: “The greatest nation on earth cannot conduct its business by drifting from one manufactured crisis to the next.” With its government in gridlock, its national debt rising, its population ageing in a financially unsustainable way, its schools mediocre compared to other rich countries, its infrastructure deteriorating, its regulations overbearing, its tax code tortuous, and its immigration system archaic, the U.S. has fallen from first in the World Economic Forum’s competitive rankings to seventh. Fortunately, Congress dealt with the two most recent crises – the sequester and FY13 budget – and is moving to other priorities. But which issues should get top priority? The priorities they choose will determine the direction of the country and the speed of the recovery.

The Cycle of Change. Congress often cites a 10-year cycle to reduce the annual deficit. That means we are living choices today that they made in the early 2000s. The priorities they set today will determine the 2025 economy. Take infrastructure, for example – arguably the easiest issue to fix. Pushed to respond in 2012, Obama said No to the Keystone XL pipeline – low environmental risk was a higher priority than new jobs and energy independence. Even if infrastructure was a top priority, Congress would take a year to pass a bill; State and local governments would take a year or more to fund projects and issue contracts; followed by years of construction. So it would be at least five years before Congressional action becomes better roads, airports, mass transit, power distribution systems, etc. The change cycle for education is longer since it will be roughly 20 years before the effects of better education for children benefit the economy and society at large. The change cycle for health care, renewable energy, and immigration are also in the 20-year range.

Now the Good News. Even though political gridlock retards growth, the underlying growth prospects are strong and parts of the economy are working well. Unemployment is slowly falling, the housing market is alive again, the stock market hit new highs, and consumer balance sheets are stronger. Displaying true American spirit, state and local governments aren’t waiting for Washington to come up with solutions – they are tackling the issues. In some cases Federal law has been a catalyst for change – education reform is an example. Virtually all states have updated curriculums, made testing more rigorous, and are using incentive programs to hold teachers accountable for results. Most states recognize independent charter schools. On the other hand, federal limits on interstate tolls have pushed states to be creative in paying for improved highways and bridges. Unfortunately, made-in-Washington crises could impact initiatives that are working. Better schools and better roads are good for the economy, but if Washington doesn’t limit growth in entitlement spending, the country may still go broke.

Private-Sector Entrepreneurship. Another reason for optimism is that U.S. companies have made innovation a priority and entrepreneurs are spreading new ideas across industries. For example, breakthroughs in fracking for oil and gas are boosting the entire economy. Many countries have large oil and gas reserves in impermeable rocks, but American companies developed the technology to tap those reserves, and entrepreneurs are commercializing the technology and the gas. States are making reforms to attract investors, and shale-gas production has made the U.S. into the world’s top gas producer. Furthermore, cheap gas is being used to produce cheap electricity which is luring investors into energy-intensive industries like steelmaking, fertilizers, and plastics. Concurrently, some investors are shifting from safe, low-yield assets to fund startups and small businesses that could become tomorrow’s Microsoft, Apple, Google or Facebook. Focusing on the priorities produces results.

Are You Focusing on the Right Priorities? As a leader, is it possible that you are pushing your people to work on peripheral priorities? If that is the case, it’s probably because you aren’t working on the top priorities either. Unless you are an individual contributor, you should be leading and managing. Getting your people what they need to achieve the organization’s goals is your top priority. One way to determine if you’re working on the right priorities is to ask your key people if they are receiving the direction, support and resources they need to get the job done. You may not like their answers, but now you will have a prioritized to-do list.

Look at Your Calendar. Your calendar is another indicator of whether you are working on the right priorities. The meetings and actions on your schedule are what you consider to be top priorities. The higher your position, the longer the time horizon should be for those items. A short time horizon, say a few weeks, might be appropriate for a first-line manager; while a horizon of years would be typical for a senior executive. For example, an executive leader whose calendar is crammed with project reviews rather than strategic planning probably is not adequately addressing the future.

Setting Priorities. Setting the right priorities is essential to success in your professional and personal lives, although the cycle of change is likely to be shorter than in government. Are priorities for your organization clear and concise? Could your team accomplish more in these turbulent times if it had fewer priorities?

Unfortunately, the leadership was on the baseball field not in the White House or Congress. After winning 98 regular-season games, the Washington Nationals ended 2012 by losing 9-7 to the St. Louis Cardinals in the deciding game of their playoff – despite leading 6-0 after three innings. It was among the most colossal collapses in post-season history with lots of potential blame. One might say the team’s failure was the baseball equivalent of the 2011 Super-Committee’s failure to recommend a federal budget. Despite that ignominious loss, Davey Johnson, the Nationals’ field manager, declared “the World Series or bust in 2013.”

Davey’s Swan Song. When he announced that he will retire after the 2013 season, the 70-year old Johnson doubled down on his expectations for the team. He said: “With the job they did last year and experience under their belt from the post-season, it’s going to be an awfully exciting year.” He engaged the players’ pride by comparing them to his 1986 New York Mets team that won 108 games and the World Series. He boasted that the Nationals were the best defensive team he has ever managed and claimed that their starting pitchers, bullpen, and bench were as good as any of his six championship teams. Johnson said “I’m going to take heat if we don’t play well.”

Leadership Attracts Talent. His leadership not only engaged the players, it enabled the front office to attract and retain top talent. The Nationals added a top-10 closing pitcher as a free agent, filled a void in center field via trade, and resigned their Golden Glove first baseman who was a free agent. Johnson’s confidence has the players believing their status as a Las Vegas favorite. “Nobody wants to come in second,” shortstop Ian Desmond says. “Yeah, it’s World Series or bust. I’m right there with him.” The players also warn “don’t get comfortable” as they push each other to produce career-best seasons.

Leadership Attracts Talent. His leadership not only engaged the players, it enabled the front office to attract and retain top talent. The Nationals added a top-10 closing pitcher as a free agent, filled a void in center field via trade, and resigned their Golden Glove first baseman who was a free agent. Johnson’s confidence has the players believing their status as a Las Vegas favorite. “Nobody wants to come in second,” shortstop Ian Desmond says. “Yeah, it’s World Series or bust. I’m right there with him.” The players also warn “don’t get comfortable” as they push each other to produce career-best seasons.

The Federal League. Federal agencies play in the Major League of government, and each agency is a team with a manager potentially like Davey Johnson. The press maligns civil servants (the players) as being under-worked and overpaid, and Congress has withheld pay raises for several years. With over two million employees, it would be inappropriate for the government to have a risk-taking, start-up culture; but its leaders must do more to attract, retain, and motivate employees who value opportunity and innovation.

Getting to Cool. During his first campaign, President Obama promised to “make government cool again.” But there’s more to running the government than campaign speeches – workers in the Executive Branch need leadership. The avalanche of threatened shutdowns, bruising private-public job competitions, adverse salary surveys, and now furloughs leave many federal workers feeling undervalued and dispirited. Government service is anything but cool these days.

Sequestration is Like Losing the Playoffs. How does a leader bring his or her team back from such a demoralizing loss? Since the recession began, millions of Americans in the private sector and state and local government lost their jobs while the federal government expanded. But the situation has dramatically reversed: federal jobs are at risk and the private sector is slowly recovering. The real effects of sequestration will lie somewhere between the sky-is-falling Obama and head-in-the-sand Republican extremes. Nevertheless, federal leaders will be challenged to retain talented people who envy stable private-sector jobs. For example, one wonders what the long-term effect of cancelling White House tours will be on attracting young professionals into civil service.

Leading During Crisis. Like Davey Johnson’s inspirational actions after the Nationals’ defeat, there is plenty leaders can do to re-engage the federal workforce. Obama distanced himself from the failed super-committee and sequester negotiations, and many Executive Branch leaders followed his wait-and-see approach. In good times, leaders transform average performers into great performers by pushing people just beyond their current abilities. In challenging times like these, proactive leadership is required to even maintain performance levels.

Teams on the Rise. Teams – whether in sports, business or politics – that improve performance year after year behave in predictable ways. The following table lists behaviors that are characteristic of teams on the rise and teams in decline. Which behaviors were displayed by Davey Johnson and the Washington Nationals, and which are displayed in Washington’s political arena? Which behaviors does your team display?

Behaviors of a

Team on the Rise

Behaviors of a

Team in Decline

Envisioning the Future

Leaders use evidence and logic to define the vision for future success

Leaders take adamant positions and support them with one-sided arguments

Evaluating Options

Everyone pushes to find new ways to achieve shared goals

People argue mainly to boost their public image and personal interests

Learning from Mistakes

Everyone learns from failure and takes responsibility to do better next time

Leaders autopsy setbacks, assign blame, and often repeat their mistakes

Unifying Actions

Everyone works together to make decisions succeed – even if they don’t agree

People acquiesce to decisions but don’t alter their actions – or worse yet, try to make the decision fail

Giving Credit to Others

Everyone compliments each other for success, and enjoys each other’s full faith and confidence

People pursue individual praise and achievements while minimizing the contributions of others

Providing Supportive Leadership. It’s essential for leaders to reach out to people in difficult times. That may seem like obvious advice, but that doesn’t make it less powerful. You will be surprised at how much can be accomplished in just one meeting with your people. To maintain high performance, make it a two-way conversation where: answer as many of your people’s questions as you can, and (2) hear their concerns and ideas.

“The measure of success is not whether you have a tough problem to deal with, but whether it’s the same problem you had last year.” – John Foster Dulles

Effective leadership conversations often go unnoticed because problems are solved when they are small and crises seldom occur. In stark contrast, the symptoms of chronically weak leadership – the kind that pushes companies into bankruptcy – are painfully obvious: tough decisions are avoided, poor numbers are justified, and strategic issues go unresolved. Effective leaders produce solutions while weak leaders fight the same problems over and over.

Kicking the Can Down the Road – Again. The 112th Congress and the president sidestepped the fiscal cliff New Year’s Day by delaying real decisions for two months. In the process, they replaced one crisis with three: (1) in February the country will hit its $16.4 trillion debt ceiling, (2) in March the continuing resolution expires and federal agencies may shut down, and (3) on March 31st $110 billion in automatic spending cuts may occur. For several months, economists have warned that “kicking the can” would be the worst possible outcome because it would extend economic uncertainty for federal agencies, businesses, and workers. No matter where people work or live, they must deal with the psychologically damaging effects of watching lawmakers argue endlessly.

Sustained Lack of Leadership. Today’s fiscal crises aren’t new. The gap between federal revenue and federal spending has been widening through a decade of weak leadership. Four consecutive $1+ trillion deficits aren’t likely to disappear easily. The bundling of so many fiscal issues at this time is the conscious and deliberate choice of polarized political leaders. An effective solution obviously requires tax increases and spending cuts on a scale that each political party would find unacceptable for different reasons. Where are the leaders who have the vision and courage necessary to make the tough decisions?

Leadership in New 113th Congress. Even though we re-elected the same president and House and Senate leaders, the 113th Congress sworn in January 4th still could identify thoughtful alternatives to the cliff if individual senators and representatives sought nation-wide solutions. It’s likely that some congressmen will be called on to make larger concessions than others, but Congress will succeed or fail as a team. If the 113th Congress doesn’t resolve the three crises, like the 112th Congress they too will have abdicated their leadership responsibilities.

The Challenge of Congressional Change. Congressional change is difficult to say the least. For example, more than ten years after the event, the September 11th Commission’s recommendations have been implemented with one glaring exception: that Congress create a single oversight for homeland security. The commission said in its report: “Of all our recommendations, strengthening congressional oversight may be the most important – and most difficult. Few things in Washington are harder to change than congressional committee prerogatives.” It was easier to reform the intelligence community, rearrange 22 federal agencies, and reassign thousands of federal employees than for Congress to relinquish the perks of committee membership. Today, over 50 subcommittees and committees still oversee portions of the Department of Homeland Security (DHS) budget. So it’s no surprise that DHS has conflicting priorities and is often accused of wasteful spending.

A New Business Model. Congress’ real challenge is to stimulate parts of the economy that have yet to recover from the 2009 crash. Leaders who specialize in corporate turnarounds know that spending actually must increase in some areas to avoid bankruptcy. Consider these areas at the federal government level:

Leadership in New 113th Congress. Even though we re-elected the same president and House and Senate leaders, the 113th Congress sworn in January 4th still could identify thoughtful alternatives to the cliff if individual senators and representatives sought nation-wide solutions. It’s likely that some congressmen will be called on to make larger concessions than others, but Congress will succeed or fail as a team. If the 113th Congress doesn’t resolve the three crises, like the 112th Congress they too will have abdicated their leadership responsibilities.

The Challenge of Congressional Change. Congressional change is difficult to say the least. For example, more than ten years after the event, the September 11th Commission’s recommendations have been implemented with one glaring exception: that Congress create a single oversight for homeland security. The commission said in its report: “Of all our recommendations, strengthening congressional oversight may be the most important – and most difficult. Few things in Washington are harder to change than congressional committee prerogatives.” It was easier to reform the intelligence community, rearrange 22 federal agencies, and reassign thousands of federal employees than for Congress to relinquish the perks of committee membership. Today, over 50 subcommittees and committees still oversee portions of the Department of Homeland Security (DHS) budget. So it’s no surprise that DHS has conflicting priorities and is often accused of wasteful spending.

A New Business Model. Congress’ real challenge is to stimulate parts of the economy that have yet to recover from the 2009 crash. Leaders who specialize in corporate turnarounds know that spending actually must increase in some areas to avoid bankruptcy. Consider these areas at the federal government level:

Infrastructure. A maintenance dollar cut is not a dollar saved, it’s a dollar (or more) that must be spent later. For example, requests by the Corps of Engineers to maintain New Orleans’ levees went unfunded for decades. The cost of rebuilding New Orleans when the levees broke was many times what the maintenance would have been – and that’s not counting the human costs.

Education. The U.S. human infrastructure is falling behind the world. For example, U.S. students rank now 10th or lower among OECD countries in all educational performance categories.

Enforcement. For example, cuts in IRS enforcement will reduce tax receipts since historically each budget dollar has produced $10 in additional tax collections.

Clearly, the federal government needs a new business model. Two blue-ribbon commissions have already said what spending should be cut, what spending should be increased, and how the revenue stream should be expanded. It’s time to pay attention to what they recommend.

Leading in 2013. 2013 will be more of a gentle downhill drift than an economic Himalayan cliff. Budget cuts will be more threatened than real as Congress and the President negotiate stop-gap measures that prolong the uncertainty. But uncertainty is scary. When employers and employees don’t know what will happen, they conjure up possibilities that often are worse than reality. 2013 could easily be a prosperous year for companies whose leaders replace uncertainty with clear offerings and strategic partnerships. What should business leaders do to prosper in 2013: (1) focus on offerings that customers consider to be essential, (2) trim the fat now by eliminating initiatives that have marginal value, and (3) invest in new products and services. That’s probably pretty good advice for leaders in government agencies, non-profits, the military, and education too.

George Bernard Shaw said: “The single biggest problem in communication is the illusion that it has taken place.” You speak with bosses, peers, direct reports, customers, and other stakeholders every day, but do those conversations create alignment, inspire innovation, mobilize change, and accomplish goals? There are four types of leadership conversations: building relationships, developing others, making decisions, and taking action. Each of them should increase the power of the others in a virtuous cycle. Building relationships and developing others produce better decisions and more effective actions. Successful actions in turn strengthen relationships and the repeating cycle increases the power of the organization. An executive who is proficient in all four conversations is likely to produce superior results.

Conversations to Build Relationships. Martin’s 360-feedback had declined. As second in command at a large office of a services firm, he was fast-tracked to become a partner. Martin wanted that position so he engaged an executive coach. Early in the first session, the coach asked Martin, “What is your job?” He responded by citing the services that his staff provided to clients. The coach prodded: “What else?” Martin described the regulatory filings his staff prepared and the issues they resolved. The coach said nothing and Martin blurted out, “Do you mean mentoring those ungrateful children who leave after we teach them everything?” Then Martin whispered, “Did I just say what I think I said?” Yes, he had. He was entirely focused on project results rather than on building relationships and developing people. That mindset did not align with his current position, let alone with the promotion that he sought.

Leaders build relationships that attract and motivate followers. How well do you know the abilities and preferences of the people around you? How closely do their goals align with your organization’s goals? How regularly do you provide useful feedback to them? Or receive feedback from them? Would any of your people leave if they received an enticing job offer? People, and your relationships with them, count. If that understanding isn’t in your DNA, reconsider your role as a leader.

Leadership Conversations to Develop Others. Earthquakes and tsunamis that disrupt supply chains, renegade employees who do nsane things, and volcanic eruptions that interrupt travel plans confirm the importance of developing others. When you develop people, you prepare them for unexpected events and industry-wide and organization-specific changes. When you hold regular conversations about opportunities, progress, and issues, your people will grow rapidly – and so will you. Developing others produces people who are more capable of helping you to build productive relationships, make better decisions, and take more effective actions.

When you became a leader, you accepted responsibility for developing people – to have conversations that encourage them to consider new possibilities and stretch their effort. If you focus solely on today’s tasks and this quarter’s goals, you will limit your long-term success and possibly jeopardize the future of the organization. Furthermore, the lack of developmental conversations and stretch assignments could push your high potentials to seek growth elsewhere, leaving you with people who do only what you tell them. To win the battle for talent, you must provide the environment and the resources for people to satisfy their goals and expand the organization’s capability.

Leadership Conversations to Make Decisions. The IT division of a company held an offsite workshop to set milestones for rolling out new web capabilities. When Helmut, the division head, received status reports and feedback from his managers, he paled. He thought everyone agreed with his design for the system, but instead found that the management team had detached from his decisions – and from him. With the project in danger of failing, Helmut offered to resign but the other division heads said he was still the best person to lead the project. Responding to the blunt feedback, Helmut reengaged his team to review earlier design decisions, listened to their ideas, and modified the direction of the project. With their decision-making process back on track, the team successfully completed the roll-out on schedule later in the year.

What would your organization’s future look like if you made decisions by throwing darts at a dartboard or reading a deck of tarot cards? How effective can your decisions be if they don’t engage the knowledge and experience of the people who work with you? What roadblocks would you run into if you failed to consider relationships in your decisions? Conversations to make decisions are the knife that whittles a universe of possibilities into success.

Leadership Conversations to Take Action. Executives from four government agencies held a planning workshop to determine how they could work together more effectively. They moved decisively through the process of evaluating performance gaps and identifying areas to improve. They selected nine new initiatives and prioritized them based on cost, risk, and return on investment. But when it came to allocating staff and funding, the process came to a screeching halt. The agencies didn’t have resources available to begin even the highest-priority initiative. The facilitator asked the executives, “What will you stop doing in order to begin the new initiatives?” They couldn’t agree on ways to free-up resources, so they delayed action by adding the initiatives to the following year’s budget request. Predictably, Congress not only didn’t approve the increases, they cut the previous year’s budget so the innovations were never implemented.

In today’s always-connected world, you rarely need more information – you need more action. Don’t wait for the perfect time to start, respond now to the changes around you. Take one small action and follow it with another – avoid analysis-paralysis. Don’t let an opportunity evaporate while you search for the ideal solution because one usually doesn’t exist. What appears to be ideal today could be less than ideal if you wait too long to implement it. Furthermore, curtailing old actions is as important as starting new ones, yet it is often more difficult.

Enhance Your Conversations. These four types of conversations are familiar because you participate in them every day, and hear them happening at levels above and below you. You may feel proficient in some conversations and uncomfortable with others. Evaluate your aptitude in each of the four as the basis for improving your communications, teamwork, and results. We understand that you are busy, but taking time to improve your conversations will reveal possibilities that you otherwise may not see. Use three criteria to measure the effectiveness of your next leadership conversation: (1) Is everyone taking action based on the same information and goals, (2) Have cultural and other differences that block productivity been eliminated, and (3) Is everyone working in unison toward the agreed-upon objectives according to the agreed-upon schedule?

Whether you’re pleased or not with the outcome, it’s ironic that the most expensive election in history (over $6 billion) produced no change in leadership: Barack Obama remains as president, Harry Reid (D) and Mitch McConnell (R) still reign in the Senate, and John Boehner (R) and Nancy Pelosi (D) rule the House. The good part is that it’s not a lame duck congress – at least not in the classic definition – and they can immediately begin to address the country’s challenges. It’s appropriate – albeit frightening – that the people who created the fiscal cliff must now eliminate it or jump off together. Is it possible for a status-quo election to change the status quo? Is it possible for a grossly partisan campaign to produce bipartisanship action? Yes – if the men and woman in leadership positions erase the leadership deficit.

No Mandate. Neither party earned a mandate in the election. Quite the contrary, many voters felt the candidates were smaller than the issues facing the country. Disappointment starts with President Obama. Voters generally like him even though he regularly engaged in the partisanship politics he so eloquently chastised in his 2008 campaign. The looming threat of the fiscal cliff requires leaders who are above such tactics. Robert Gates, former Secretary of Defense under Presidents Bush and Obama, said: “The inability of politicians to step outside their ideological cocoon prevents the best ideas from being implemented.” Admiral Michael Mullen, former Chairman, Joint Chiefs of Staff, said: “The gravest threat to United States’ national security is the abundant disorder in its fiscal affairs.” These leaders are describing a burning platform – the economic decline of the United States.

The Burning Platform. To change the mindset of the American people and congress, Obama must describe the burning platform in terms so clear that every American and every special interest group will be eager to sacrifice to avoid it. Romney lost the election because he failed to explain the burning platform to voters and, of course, Obama could not have won on a burning platform. Two years ago, Erskine Bowles and Alan Simpson lead an Obama-appointed commission that developed a plan to dig the U.S. of its economic sinkhole. They told the president and congress to warn the American people that they must pay higher taxes, work longer, expect less in retirement and other benefits, and change from consumption and short-term gratification to investment in lasting social and business infrastructure. Obama and congressional leaders ignored those recommendations but we re-elected them anyway.

Clinton-Bush Apology Tour. To drive the message home in a bipartisan way, former presidents Bill Clinton and George W. Bush should jointly tour the country and apologize in ways that probably would offend their political parties. Bush would concede it was a mistake to reduce taxes and take the country into two unfunded wars. Clinton would apologize for not fixing Social Security and Medicare when he had a golden chance. Bush would dispute Tea-Party Republicans’ claim that even modest tax increases would cause economic ruin. Clinton would condemn Democratic attacks that equate vital Social Security and Medicare changes with demolishing those programs. Obama would cease being the main spokesman for his party’s ideology and together with the former presidents offer a vision for America’s future. Such bold leadership would stimulate lively public debate and shake congress out of its entrenchment.

Give Us a Vision. Most voters would say Romney’s vision for America was to shrink government and repeal Obamacare. That vision lost – but it was clear. Ask people about Obama’s vision and they shrug their shoulders. Investments in infrastructure, education, energy, and research are needed; but they won’t reduce unemployment or improve economic conditions in the short term. The country needs a vision to guide its decisions to:

regain the middle-class prosperity of the 1960s

share prosperity more evenly and eliminate poverty

enable the government to deliver entitlements that it promises

implement a rational climate-change policy

encourage investors to build new Microsofts, Apples and Amazons

Obama must use the bully pulpit to explain the vision and show the world that the U.S. is putting its finances in order.

Management 101. If congress took Management 101 at any business school, it would fail because it is operating the government without a strategic plan, without a budget, and without metrics for success. Most of us agree the government is failing, but how should we measure its performance:

What is a healthy GDP growth rate for the world’s largest economy?

What annual deficit and national debt are tolerable?

What are appropriate tax rates for each economic class?

What should our balance-of-trade be?

How much should be spent per-capita on medical care?

What is the baseline unemployment rate?

Let’s put numbers on success so congressional leaders and the public can use quantitative objectives as the basis for solutions that everyone supports wholeheartedly.

Leadership Takes Courage. Presidents are not great leaders just because they get elected. To be remembered as great leaders, they must present a vision for the future and confront detractors in congress and special interest groups with Lincoln-like courage. Four years ago we celebrated Obama’s election and hoped that a young, charismatic president would heal partisan divides. Obama’s re-election is less inspiring, but it gives him an opportunity to fill the gaps in his record. Hopefully, he will demonstrate the willingness and courage to resolve issues that he has avoided for four years. Courage isn’t easy in politics because the best course of action isn’t always clear. Effective leaders rise above their craving for popularity and persuade people to acknowledge the necessity for essential but distasteful actions.

So What’s Next? Obama should present his vision to Capitol Hill in the form of a bill – and follow up with bully-pulpit speeches to the American people and business executives. His legislative proposal should frame the issues and present solutions in five areas:

Long-term fiscal stability. An easy way would be to endorse the Simpson-Bowles plan which is widely accepted as bipartisan

Entitlement spending. Make adjustments over several years in how payments are indexed to inflation, the eligibility age and criteria, and taxes that fund the programs

Discretionary spending. Shrink the defense budget by ending marginal and irrelevant programs. In civilian areas, shift spending to state and local grants and the private sector

These ideas have been proposed and analyzed countless times, of course, but what has been missing is the presidential leadership to make them happen. Closing the leadership deficit will require courage and action!